Good day, everyone. Thank you for being here. Welcome to Xperi's Second Quarter 2023 Earnings Conference Call. I will now hand the call over to Mike Iburg, Xperi Head of Investor Relations. Mike, please continue.

Thank you. Good afternoon, and thank you for joining us as Xperi reports its second quarter 2023 financial results. With me on today's call are Jon Kirchner, Chief Executive Officer; and Robert Andersen, Chief Financial Officer. In addition to today's earnings release, there is an earnings presentation, which you can access along with this webcast on our Investor Relations website at investor.xperi.com. Before we begin, I'd like to provide a few reminders. First, I would like to note that unless otherwise noted, all comparisons are to the same quarter in the prior year. In addition, the second quarter of 2022 was calculated on a carve-out basis prior to Xperi's separation from Xperi Holding Corporation on October 1, 2022. Xperi Holding Corporation is now known as Adeia. Second, today's discussion contains forward-looking statements that are predictions, projections or other statements about future events which are based on management's current expectations and beliefs and they're subject to risks, uncertainties and changes in circumstances. For more information on the risks and uncertainties that could cause our actual results to differ materially from what we discussed today, please refer to the Risk Factors and MD&A section in our SEC filings, including our most recent Form 10-Q. Please note that the company does not intend to update or alter these forward-looking statements to reflect events or circumstances arising after this call. Third, we refer to certain non-GAAP financial measures, which are detailed in the earnings release and accompanied by reconciliations to their most directly comparable GAAP measures, which can be found in the Investor Relations section of our website. Lastly, a replay of this conference call will be available on our website shortly at the conclusion of this call. I would now turn the call over to Xperi's CEO, Jon Kirchner.

Thank you, Mike, and thank you, everyone, for joining us on our second quarter 2023 earnings call. We're pleased to deliver another quarter of significant strategic progress and solid financial results. I'll let Robert walk you through the details in just a moment, but let me touch on revenue and growth rates. Revenue in the quarter was $127 million, up 1% from the prior year but as some of you may recall, last year's Q2 included a significant one-time benefit from a mobile imaging customer, impacting Consumer Electronics revenue. When excluding this benefit, year-over-year growth would have been in excess of 10% due to strong growth in Media Platform and Connected Car. Our first half revenue was consistent with the growth rate projections we discussed at our Investor Day last September, with Media Platform and Connected Car growing rapidly, Consumer Electronics showing modest growth and Pay TV down mid-single digits. The net result of our first half performance, coupled with initiatives underway is that we remain on track and expect to achieve our full year outlook. Lastly, we're pleased to see strategic momentum continue in key growth areas of our business, particularly in Media Platform and Connected Car. Our efforts are focused on four key growth areas, and we're making significant progress in each. These are Connected TV advertising, where we offer our TiVo operating system to power smart TVs and monetize ad-supported viewing; In-cabin entertainment, where our DTS AutoStage combines broadcast radio, Internet metadata and video to enhance the automotive experience; In-cabin monitoring, where DTS AutoSense combines our imaging technology and machine learning to improve automotive safety, comfort and convenience; and IPTV, where we offer our industry-leading content-first video over broadband platform. Each of these markets is expected to expand rapidly over the next several years as Internet connectivity, streaming and consumer expectations cause entertainment to be more ubiquitous and advertising dollars shift to new delivery methods. I'd like to walk you through some of our significant accomplishments since our last earnings call. Within Media Platform, earlier today, we announced that Sharp is the second TV OEM to be powered by TiVo. We're excited to be partnering with Sharp on a multi-year, multimillion-unit relationship that is expected to ship TVs starting in Europe next year. In addition, we signed a third smart TV OEM to integrate TiVo OS. We now have three TV OEMs with plans to ship products in 2024 and importantly we expect to have distribution in both Europe and the U.S. Our pipeline remains robust, and we anticipate having other OEMs under contract by the end of this year. This is a tremendous accomplishment and strong validation of our strategy. As outlined on last quarter's call, we expect Vestel to have TVs powered by TiVo in the European market for the upcoming holiday season. These initial shipments are an important first step. However, the monetization of these TVs will build as our footprint grows and users engage with content. In addition, Sony, a longtime partner of Xperi, will deploy our web browser technology within their smart TV lineup, enabling content, search and discovery and creating an additional pathway to ad-supported content monetization over time. Overall, we're very pleased with the progress of our independent Media Platform strategy and its long-term growth prospects. Our Connected Car business also saw continued momentum in the quarter. As you've likely seen, the automotive industry is making extensive investments in making cars more connected as Internet connectivity is dramatically altering the in-cabin entertainment experience. As part of this transformation, our DTS AutoStage in-cabin entertainment platform is expanding rapidly. AutoStage is now deployed in more than four million cars across five automotive brands globally, and we expect the momentum to continue. BMW's decision to deploy DTS AutoStage video service powered by TiVo in their 5 series later this year is a good example of our progress. In addition to the initial success of AutoStage, we expect this combined footprint to grow rapidly, driven by model and geographic expansion, creating the long-term opportunity for advertising monetization and feature upselling. To further improve the user experience, we recently signed agreements with broadcast groups representing over 4,000 radio stations across North America, Europe, Australia and New Zealand. This extensive network of broadcasters will enhance the in-cabin experience by sending additional metadata that AutoStage will combine with Internet content to enrich the user experience. Enhancements include additional content such as album art, lyrics, personalized recommendations and a real-time guide showing what is currently playing on other stations. Turning to DTS AutoSense, our in-cabin driver and occupant monitoring system continued its momentum during the quarter. We signed a new contract with a top-three automotive OEM with plans to go into initial production in late 2024 for the 2025 model year. We now have design wins from six automotive brands encompassing over 80 different models. In addition to these next-gen platforms, we continue to make progress in our well-established HD Radio business. This quarter, our HD Radio solution has been launched on more than 10 additional models for the North American market, increasing our share of new car production. The in-cabin entertainment and monitoring markets are expected to double over the next five years, and the success we're seeing today sets the stage for meaningful long-term Connected Car revenue growth. Within the Pay TV business, IPTV continues to make steady progress, helping to mitigate the secular decline in linear Pay TV subscribers. Our IPTV solutions had another consecutive quarter of healthy double-digit subscriber growth, adding more than 150,000 net new subscribers in Q2. The continued momentum in IPTV is being driven by new broadband service providers offering our IPTV services, and at the same time, customers are increasing the velocity of IPTV adoption as they package our solution together with their broadband services to create a more attractive bundle. In addition to collecting a monthly subscriber fee for IPTV, we also monetize the viewing of ad-supported content through TiVo+, where we offer nearly 160 channels of free ad-supported television content. As the market is shifting towards more FAST content being consumed, our video service provider customers are increasingly offering TiVo+ to expand the entertainment options to their subscribers, whether broadband only or video. And lastly, our momentum continues with the expansion of TiVo+ availability across 25 additional video service providers during the quarter, bringing more scale to this element of our monetization footprint. In our discovery product line, we licensed search and recommendation technology to our customers enhancing their ability to drive consumer engagement. During the quarter, we significantly expanded our relationship with a top-five U.S. video service provider increasing our footprint by millions of additional households and demonstrating the value of our deep heritage of applying AI to personalized content discovery. Turning to Consumer Electronics, we signed several renewals with major consumer electronics manufacturers. These license agreements allow consumer electronics manufacturers to continue integrating DTS audio and Play-Fi wireless technologies into their products for the next several years, validating the market appeal and longevity of these innovative technologies. In addition, we celebrated the 30th anniversary of DTS. Our immersive audio technology first deployed in the 1993 classic film Jurassic Park is now pervasive across consumer electronics and mobile devices. Turning to Perceive. We're continuing down the path we set out last quarter and expect first revenue this year against the backdrop of tremendous interest in large-scale AI. We continue to make progress in our development efforts to scale our compression technology and are engaged with customers and partners on its application to deploying large language models or LLM. Recognizing the magnitude of this opportunity, we're exploring options for strategic partnerships to help accelerate our path to market. We expect to report additional progress over the coming quarters. In summary, it was a successful quarter from many perspectives. We continue to hit specific milestones that both validate our solutions and reaffirm our strategy. We remain on track to achieve our strategic objectives and long-term financial targets. With that, I'll turn the call over to Robert to discuss our financials.

Thanks, Jon. As Mike mentioned earlier, unless otherwise noted, all comparisons are against the same quarter in the prior year. Total revenue for the second quarter was $127 million, up 1% from the prior year. Last year's Q2 included a significant revenue benefit from a mobile imaging customer. Excluding this one-time benefit, our Q2 year-over-year revenue growth would have been greater than 10%. Pay TV, our largest revenue category was down 4%, an improvement compared to the 6% decline we saw in Q1. Strong growth in IPTV during the quarter helped to mitigate declines in our core Pay TV product lines. Consumer Electronics was down 20%, primarily due to the one-time revenue event last year. Nonetheless, we saw solid traction in audio renewals during the quarter for both DTS and Play-Fi that helped to bolster the overall performance within Consumer Electronics. Connected Car was up 13%, primarily due to high HD Radio unit volume as car manufacturers increased production following several years of supply chain issues. As our customer programs advance, we also saw a doubling of the combined revenue for our AutoSense and AutoStage solutions. Media Platform was up 149% with more than half of this increase due to growth in monetization and the rest due to incremental revenue from the Vewd acquisition. I've included a slide on the first half in revenue results, and although I won't go through this in deep detail, our first half performance by business unit is broadly consistent with the expected growth rates we articulated at our Investor Day last year and has us well within the range of our full year revenue outlook. Our non-GAAP gross margin for the quarter was $97 million, or 76%, a decrease of approximately 300 basis points from last year, driven primarily by a shift in margin contribution from Consumer Electronics to Media Platform due to the one-time high-margin mobile imaging customer revenue that occurred last year. Non-GAAP adjusted operating expense for the quarter was $98 million, up 5% from the prior year's carve-out financials, but down 1% sequentially. Our adjusted EBITDA was $5 million resulting in an adjusted EBITDA margin of 4%. After accounting for tax and interest expense, our non-GAAP loss per share was $0.09. Moving to the balance sheet. The company ended the quarter with $112 million in cash and cash equivalents, a slight increase from Q1. Our cash flow from operations in the quarter was a usage of $2 million due to modest changes in working capital. We expect operating cash flow in the second half of the year to be positive while the full year is currently expected to be a usage of cash, primarily due to an uptick in DSOs and an increase in unbilled receivables from strong execution in multi-year deals. Overall, we remain comfortable that we have sufficient cash to run the business. Turning to our financial outlook for 2023. We are reaffirming our previous guidance ranges and providing the following commentary. We continue to expect full year revenue to be in the range of $510 million to $540 million and adjusted EBITDA margin to be in the range of 6% to 10%. We are lowering our full year non-GAAP tax estimate from $20 million to $25 million to approximately $20 million. Our tax expense is not linear throughout the year, due primarily to the timing of foreign withholding and certain federal and state taxes. So while the non-GAAP tax was approximately $5 million in the first half, we expect the second half to be approximately $15 million distributed equally between the two remaining quarters. Basic share count is still expected to average 43 million for the year and fully diluted share count is expected to average approximately 50 million for the year. That concludes our prepared remarks. Let's now open the call for questions.

Your first question comes from Steven Frankel from Rosenblatt Securities.

Jon, can you provide more details on last year's mobile imaging transaction? Was it an upfront payment or a catch-up? How should I understand this anomaly?

It was the resolution of a contractual matter that dated back a few years prior, coupled with the execution of a go-forward license.

And then to focus on more important things going forward, it sounds like you made some good progress with TiVo OS and you talked about entering the North American market. Could you tell us whether that's from the new OEM or one that you had going in the quarter that now tells you they're going to North America?

I think we're going to end up with multiple players in North America next year, Steve. And I think that's all I really can say for competitive and strategic reasons.

What insights are you gaining regarding monetization from the Pay TV business that might influence your approach to TiVo OS as it launches? Is there any early monetization happening? Where do you envision it should be?

Well, I think there are a couple of aspects as you think about long-term monetization and TiVo OS that are important. One is you need meaningful video service infrastructure that we have in spades serving up tens of millions of households through our Pay TV business and IPTV. We also have quite a bit of history and experience in looking at data that's coming off these TVs through IPTV and our various software players that sit on various boxes in the field. I believe that will enable us to prepare various data segments that are of interest, and we know from direct experience to our advertising partners. The back-end infrastructure that is essential to turning on the monetization engine and then obviously scaling and accelerating it over time is something we have been working on for some time and is really a reflection of the business we have. The key issue for us is getting our footprint out there, which I believe as you see multiple players in the market in 2024, that build will begin to ramp. As we exit 2024 and get into 2025, we expect that monetization to be coming online at faster rates. That positions us well to capture a slice of this market that is both attractive and generates good long-term growth as well as very attractive margins over time.

Your next question comes from the line of Hamed Khorsand with BWS Financial.

So the first question I had was from the competitive landscape in Auto, what are you seeing in the form of AutoSense and are you losing any share competitively to anyone or how do you feel about winning more share and the timing of when all of this comes into revenue for you?

I believe that it will develop gradually as our current design wins integrate into various models with our customers. We now have nearly 80 models contracted to support our in-cabin monitoring technology. Our technology and solutions are quite unique, and as a result, we are frequently winning competitions for broader occupancy monitoring. The industry uses various terms for this. Therefore, I am optimistic about the long-term outlook for the business. I do not anticipate losing business competitively, although there are others in the field. Additionally, some Tier 1 and Tier 2 companies are exploring the development of their own solutions. One of our distinct advantages is the extensive imaging expertise we have acquired through years of work in facial recognition and body posture, which stems from our significant mobile imaging experience. We have a strong foundation of both data and expertise in this area. For the past couple of years, we have been applying this knowledge to the automotive sector, and I believe it is proving effective as we engage in competitive pitches.

And then looking out into the second half, would the revenue breakdown look almost similar to what the first half looked like? Are you expecting some sort of pickup in one of the four segments?

When we analyze the revenue breakdown for the remainder of the year, we expect the timing of the revenue to be quite similar to last year. If we were to forecast the revenue for the third and fourth quarters collectively, it would follow the same pattern as a percentage basis from the previous year. If last year saw an increase of about 5% or 6%, we would anticipate a similar outcome. Regarding the mix, we've noticed steady progress in line with our expectations, particularly with strength in the Automotive and Connected Car sectors, as well as the Media Platform, and we expect some contribution from Consumer Electronics for the rest of the year.

And then one final question is regarding Sharp; is that purely for Europe? Or will that broaden out to other regions?

It starts initially in Europe, and I think we'll have more to say about broadening that relationship over time.

Your next question comes from Matthew Galinko from the Maxim Group.

Can you explain why the entry of TiVo OS into the North American market might be unexpected compared to what you've indicated in the past? I'm interested in understanding what has changed in either the market or your strategy that makes North America more appealing than other regions.

Matt, I don't know that it necessarily has been any recent event. We've been in pipeline discussions for some time globally with different partners. There is, however, a wide and growing recognition that for the brands who don't have the resources, perhaps to build their own, we believe it's a substantial amount of TVs that exist in the North American and European markets that an independent media platform becomes really important and one that can provide the benefits that TiVo OS offers. That is the brand's ability to own their customer, to share the data, to have a content-neutral platform that is really about driving the best user experience and therefore, monetization and then ultimately participating in the back-end economics of the long tail of the TV. I think that value proposition resonates strongly. I believe some have been sitting on the sidelines watching us further develop, but it’s clear now that we’re coming to market with multiple players. As we have more success, that confidence increases. Additionally, the quality of the solution that we are showing has also been instrumental in getting people comfortable that we've got a solution that will make it easy to find, watch and enjoy what consumers want. The higher the engagement with content, the higher the potential revenue monetization and sharing in partnership with these TV brands. In short, I think it’s what we expected. In some ways, it’s moving even more quickly than we expected, but we still have much work to do. Nonetheless, we are very, very excited about the trajectory and where it will end up here in the next couple of years, completely consistent with what we more or less outlined last September in our Investor Day and likely ends up better sooner.

And then can you maybe touch on or expand on what a strategic partner might do for you and Perceive in terms of accelerating towards the LLM opportunity? Or yes, just can you cover that in a little bit more detail?

Sure. As you look to the LLM market and the wide-scale deployment of these larger AI solutions, it's clear that there's going to be a need for additional resources, capabilities, perhaps distribution scale, financial resources and whatnot, if you're really going to maximize the value of the technology. That recognition has made conversations interesting with strategic partners. As we're engaged in various discussions, I think there's tremendous interest in the fundamental challenge, which is if you want to bring the goodness to consumers at mass, how do you deal with the inherent scalability challenges of these massively large models? Perceive is very much focused on advanced compression technology that can address that challenge and ultimately bring higher performance and greater power efficiency to bear. This will be essential for folks as they look to scale this. In short, I believe it's a recognition that the market opportunity is vast, and we, as a technology player with a part of the solution, likely will be best off working with a strategic partner or partners to bring that technology to market.

Your next question comes from Nick Zangler with Stephens.

Congratulations on the new relationships. Can you provide an overview of the three TV relationships you currently have, either in total or in relation to one another? Additionally, have these partnerships helped you reach your target of $7 million in active accounts for 2025, or do you think you may need a few more successes?

No. I think with what we have, what we laid out is certainly achievable. I believe we'll have more to say on this topic as we get a couple of quarters down the way.

I wanted to ask about the commentary regarding Media Platform and the content browser that Sony plans to implement. If we are discussing Sony TV, my understanding is that the Google TV operating system is used exclusively on Sony devices. Could you provide more details on what exactly is happening here? You also mentioned another avenue for monetization, so it would be great if you could elaborate on that new relationship as well.

Sure. So Vewd, as you'll recall, we acquired them last year, has a web content browser that has been deployed on various systems, including Android TVs. So it's the use of that in connection with their TVs. I think it just is one more example of, let's call it, some of the value that we were able to gain through the Vewd acquisition.

This concludes the Q&A session. I'll now turn the call back over to the company for closing remarks.

Thanks, operator, and thank you, everyone, for joining today's call. We're excited about our continued strategic momentum and our solid operating performance. I'd like to thank our employees, customers and partners for helping us continue to achieve our objectives. We look forward to reviewing our Q3 results with you in early November. This concludes today's call.

Ladies and gentlemen, thank you all for joining. You may now disconnect.